Family feud over trust shares splits court judges
A COURT battle involving the family of late fishing tycoon Peter “Padda” Kuttel over the sale of the family trust’s shares – worth millions – to a company controlled indirectly by two of his three feuding sons has ended with the Supreme Court of Appeal (SCA) issuing a split judgment on the matter.
The Kuttell family has been involved in Cape Town’s fishing industry since family patriarch Padda Kuttel left a career as a lawyer in the early 1960s. Padda, who died in May 2019, after the launch of the application, and his wife Joy, who died a week before the SCA heard the application, set up the Padjoy trust in March 1981.
After the parents died the trust’s capital was to be distributed equally between their three sons, Peter, Francois and Adrian. There were five trustees – Joy, Francois, Adrian and two independent trustees, attorneys John Levin and Barry Adams.
Peter, who has lived in the US for 30 years, originally lost the application in the Western Cape High Court but then petitioned the SCA.
The SCA had to decide whether the approval of the court was required for the validity of the sale of the shares; whether the transaction was open and bona fide; and whether Peter had been treated unfairly by not being given an opportunity to bid for the share.
Writing the majority judgment, Judge Clive Plasket said: “No doubt, the enmity between Peter and his father, in particular, as well as with the family more generally, probably also contributed to him being the only beneficiary who is not a trustee.”
The SCA found against Peter and ruled the court’s approval of the sale of the shares was not required and that the transaction was open and bona fide.
To the extent that Peter was treated differently to his brothers, the majority found that differentiation was justified in the context of the powers of the trustees and the fact that Peter as a beneficiary had no right to bid for the shares.
The minority judgment by Judge Mahube Molemela held the sale of the shares by the trust to Grace Investments, without affording Peter an opportunity to bid for them, was discriminatory and not justified.